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DaVita HealthCare Partners Inc (NYSE:DVA)
Beneish M-Score
-2.64 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

DaVita HealthCare Partners Inc has a M-score of -2.64 suggests that the company is not a manipulator.

DVA' s 10-Year Beneish M-Score Range
Min: -3.55   Max: -0.76
Current: -2.64

-3.55
-0.76

During the past 13 years, the highest Beneish M-Score of DaVita HealthCare Partners Inc was -0.76. The lowest was -3.55. And the median was -2.60.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of DaVita HealthCare Partners Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8967+0.528 * 1.0437+0.404 * 0.9294+0.892 * 1.2167+0.115 * 0.9323
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9601+4.679 * -0.0558-0.327 * 0.9663
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,013 Mil.
Revenue was 3172.489 + 3042.776 + 3063.209 + 2999.586 = $12,278 Mil.
Gross Profit was 925.951 + 863.004 + 935.377 + 904.252 = $3,629 Mil.
Total Current Assets was $4,161 Mil.
Total Assets was $17,926 Mil.
Property, Plant and Equipment(Net PPE) was $2,291 Mil.
Depreciation, Depletion and Amortization(DDA) was $560 Mil.
Selling, General & Admin. Expense(SGA) was $1,207 Mil.
Total Current Liabilities was $2,608 Mil.
Long-Term Debt was $8,391 Mil.
Net Income was 147.683 + 183.289 + 212.278 + 136.628 = $680 Mil.
Non Operating Income was -95.855 + 1.698 + 3.45 + 2.113 = $-89 Mil.
Cash Flow from Operations was 262.391 + 419.107 + 354.187 + 733.128 = $1,769 Mil.
Accounts Receivable was $1,845 Mil.
Revenue was 2871.673 + 2829.582 + 2426.939 + 1962.966 = $10,091 Mil.
Gross Profit was 857.353 + 868.691 + 764.41 + 622.048 = $3,113 Mil.
Total Current Assets was $3,132 Mil.
Total Assets was $16,456 Mil.
Property, Plant and Equipment(Net PPE) was $1,991 Mil.
Depreciation, Depletion and Amortization(DDA) was $447 Mil.
Selling, General & Admin. Expense(SGA) was $1,033 Mil.
Total Current Liabilities was $2,215 Mil.
Long-Term Debt was $8,234 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2012.837 / 12278.06) / (1844.887 / 10091.16)
=0.16393771 / 0.18282209
=0.8967

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(863.004 / 10091.16) / (925.951 / 12278.06)
=0.30843847 / 0.29553399
=1.0437

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (4161.247 + 2290.844) / 17925.571) / (1 - (3131.834 + 1990.963) / 16455.509)
=0.64006218 / 0.68868803
=0.9294

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=12278.06 / 10091.16
=1.2167

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(446.508 / (446.508 + 1990.963)) / (560.207 / (560.207 + 2290.844))
=0.18318495 / 0.1964914
=0.9323

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1206.662 / 12278.06) / (1032.922 / 10091.16)
=0.0982779 / 0.10235909
=0.9601

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((8390.578 + 2608.148) / 17925.571) / ((8234.29 + 2214.888) / 16455.509)
=0.61357744 / 0.63499573
=0.9663

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(679.878 - -88.594 - 1768.813) / 17925.571
=-0.0558

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

DaVita HealthCare Partners Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

DaVita HealthCare Partners Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.06051.62280.67910.96611.11170.94210.96430.97071.01440.7367
GMI 1.03611.02481.03370.96031.03451.00940.99520.92821.03491.0509
AQI 0.95541.25910.98160.95770.97230.97360.96961.09361.2080.9509
SGI 1.12321.29381.64121.07861.07521.07931.05541.0831.17241.437
DEPI 1.03041.26250.81270.99160.9960.99891.02921.06071.01340.7985
SGAI 1.06221.1091.05641.00420.96940.75251.03211.10241.20970.835
LVGI 0.92331.15070.9230.9210.95610.92861.04230.98551.03080.9602
TATA -0.0804-0.0418-0.0006-0.033-0.0267-0.0328-0.0447-0.0793-0.0348-0.0669
M-score -2.67-1.76-2.20-2.61-2.41-2.56-2.70-2.81-2.42-2.62

DaVita HealthCare Partners Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.97940.92460.94061.01520.96960.92670.81130.73670.80520.8967
GMI 0.91740.93240.97941.03471.06181.08021.07151.05091.05631.0437
AQI 1.09011.09071.10081.2081.1921.1611.07130.95090.95670.9294
SGI 1.11621.12811.1251.17151.26221.35151.461.4371.30911.2167
DEPI 1.05811.06541.02121.01340.93110.85490.79980.79850.86650.9323
SGAI 1.1281.25021.21271.21071.12140.87260.87060.8350.84960.9601
LVGI 0.97720.94970.99521.03081.0481.04410.98320.96020.94650.9663
TATA -0.0723-0.0718-0.0486-0.0348-0.0435-0.04-0.0614-0.0669-0.0593-0.0558
M-score -2.75-2.79-2.65-2.42-2.41-2.32-2.46-2.62-2.62-2.64
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